Will Netflix be the next big theater chain?


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Netflix has been consistently releasing original feature films since 2015, when their first film, Beasts of No Nation, premiered on the service. But Netflix has never really been a reliable place for quality original films. Critical failures like The Ridiculous Six and Bright have marred Netflix’s reputation among cinephiles, despite having strong viewership on the service. However, the idea that “Netflix movie = trash” may be changing. This season’s crop of Netflix originals seem to be of a different brand. Mainly, they’re pretty good. While in the past, Netflix has appeared to release their films willy-nilly, with little thought as to where they sit in the broader, industry-wide release schedule, 2018 has seen them adopt a specific and effective formula. This year Netflix released trashy movies in the dump months (The Cloverfield Paradox, Mute, When We First Met), crowd-pleasers in the summer (To All The Boys I’ve Loved Before, Set It Up), and now prestige films during Oscar season (Roma, The Other Side of the Wind, The Ballad of Buster Scruggs). This release schedule mimics that of large, theatrically-releasing studios like Warner Brothers or Paramount. Additionally, Netflix’s fall awards contenders have all snagged short theatrical runs in New York and Los Angeles. While this is likely just Netflix’s attempt to fulfil the Academy’s eligibility rules (a narrative feature must play for seven consecutive days at a Los Angeles County theater to be eligible for the Oscars), these theatrical runs may hint towards a change in Netflix’s anti-theater mentality.

In New York City, a number of Netflix produced/distributed films enjoyed one-week engagements at IFC Center on West 4th Street. Films like Sara Colangelo’s The Kindergarten Teacher and Orson Welles’ The Other Side of the Wind came and went alongside recent IFC tentpoles like Paul Dano’s Wildife and Ali Abbasi’s Border. However, it has not been easy for Netflix to get their films onto the big screen. Alamo Drafthouse has (quite publicly) declined to show Oscar-front runner Roma in any of their locations later this year. Netflix was reportedly asking for Roma to receive a four-week run in 70mm starting in late November, one of the busiest seasons for movie theaters. Roma will also be available to stream on Netflix just a week after its theatrical release, making it difficult for any theater to justify an extended run. The theater’s assumption is that a large portion of the audience already has a Netflix subscription, and will likely opt to stay at home if given the option. Ultimately, Landmark and IFC Center will be releasing the film in Los Angeles and New York City, though not all in 70mm like Netflix had hoped. But with Netflix’s day-and-date release windowing and their aggressive logistical demands, it is unclear how successful they will be with theater chains in the future. That is, unless they had their own.

This move would not come as a shock, especially considering that Netflix was in talks to buy the Landmark Theater chain from Mark Cuban earlier this year. The deal didn’t come to fruition, as Netflix deemed the price tag too high, but that doesn’t mean they won’t try a similar move some time in the future. 2018 has seen Netflix release 37 original dramas, 33 comedies, 16 documentaries, and 3 variety specials (like Springsteen on Broadway and Derren Brown: Sacrifice). When you add it all up, Netflix produced 89 original feature-length films in 2018, more than enough to stuff their theaters year-round. Cinema historians are screaming at me right now, “What about the law?! What about US vs. Paramount?!” And those overanxious nerds are right. There is a question surrounding the legality of such a move. Since 1948, major studios have been unable to own brick-and-mortar theaters due to the Supreme Court decision in United States v. Paramount Pictures, Inc. In that case, the court decided that the ownership of theater chains by studios “constituted anti-competitive and monopolistic trade practices.” The bottom line was that the studios were forced to sell off their property and stop the practice of block-booking, which required theaters to book a studio’s entire film slate almost a year in advance. To this day, no studio is legally permitted to own a brick-and-mortar theater chain. If they were, you would see Disney movie theaters just as frequently as you do Regals or AMCs. One of the only exceptions to this rule is IFC Center, which was purchased by AMC Networks (the TV company, not the theater chain) in 2005. AMC Networks also owns IFC Films, an independent film studio that has produced films like The Death of Stalin and Personal Shopper. IFC Center shows theatrical runs of all IFC Films’ releases, so why is that allowed? Well, AMC seems to have skirted the antitrust ruling due to the fact that they are primarily a television studio. They also positioned IFC Center as an extension of the AMC-owned IFC television channel rather than an extension of their film studio of the same name. Over the last thirteen years, IFC Center has remained a West Village fixture, screening independent films from many different studios, not just IFC Films. But IFC Films’ impact on the film market is tiny compared to the market-dominating force of Netflix. So what would happen if Netflix tried to do the same thing? They wouldn’t settle for just one theater, or even one in every city. When Netflix does anything, they do it big.

Only time will tell if Netflix will or even can own their own theater chain, but it would be a game changer if they did. Having a film in theaters raises its legitimacy, and with Netflix making large-scale deals with some of the world’s hottest directors, they will need to keep opening in theaters. The next few years will see Netflix premiere original films from Martin Scorsese, Michael Bay, Guillermo del Toro, and the Duplass Brothers among so many others. With such high-profile collaborators, many of whom are known to be “film purists,” Netflix can’t get away with releasing them as exclusively on streaming. If Alfonso Cuarón gets a theatrical release, you bet Scorsese and Bay are already negotiating to get the same. Netflix allows its filmmakers an amount of creative freedom that most studios can’t provide, but they won’t be able to snag those big names without theatrical releases. So in five years, when you walk across 42nd Street, will you see a Netflix Cineplex next to the brightly advertised AMC and Regal theaters? Will your Netflix subscription include a $10 add-on for their theatrical releases? I don’t know. But I would bet they give it a try.

David Merkle